Lenders turn screw on homeowners

Borrowers should keep an eye out for costly changes to their home loans

Banks and building societies are stepping up their pressure on mortgage borrowers as intense competition in the business-banking market forces them to turn the screw on personal customers.

So advisers are warning that borrowers must take more care in choosing the right deals in the first place, and then regularly check to see that they are not being ripped off by quiet, but damaging, changes.

Last week, Nottingham building society angered thousands of mortgage customers by increasing its standard variable rate (SVR) — even though the Bank of England has not touched interest rates since last August, when its base rate actually went down.

And brokers are warning homebuyers and remortgagers tempted by the prospect of cashback that — contrary to the impression given by the lenders — deals of this kind will usually end up costing them dear.